In the first two weeks of December, Georgian retail prices increased. ISET’s Retail Food Price index gained 1.2% m/m (compared to mid-November). Nonetheless, compared to December 2015, the holidays will cost less than n 2016, as we recorded a significant 13% decrease in food prices.

IN THE SPOTLIGHT

Most noteworthy bi-weekly price increases were observed for the following food items: eggplant (14%), beef (8%), and rice (8%). While the weaker Georgian lari was supposed to boost the prices of imported commodities (the Georgian lari has lost value during the last couple of weeks), surprisingly, prices dropped the most for imported apples (18%), imported tomatoes (13%), and cucumber (8%).

Table 1: Changes in imported apples and tomatoes prices

CHEAPER BY THE DOZEN

In the first half of December, 1kg of imported tomatoes were 20% cheaper than local: the average price of imported tomatoes is 2.00 GEL, while Georgian tomatoes cost 2.50 GEL. Similarly, imported apples vs Georgian apples are 2.37 GEL and 2.00 GEL, respectively. Such price differences can influence consumer behavior in holiday purchasing decisions and shift their preference to imported vegetables and fruits.

Tomatoes that are sold at observed supermarkets are imported from Turkey. This issue is especially important as the government of Georgia is planning to present a new anti-dumping law. In December 2015, Russia started placing limits on Turkish imports. In response, Turkey dumped their products in other markets, including Georgia (see more in our previous FPI article). If the new anti-dumping law targets foreign producers who sell their products below cost, local producers can take advantage of the situation and push prices up; this, in turn, will disadvantage Georgian consumers, who will no longer be able to enjoy cheaper imported food.